Maid agencies defying rules or using trickery on employers

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New system in place since May; Old cost structure still in useSome agencies flouting Jakarta's new rules on payment of placement fees

Published on Oct 13, 2012Straits Times

By Amelia TanA NEW system for recruiting maids from Indonesia is coming apart, with most maid agencies defying the rules or using trickery to get around them.

At the heart of the system the Indonesian government introduced in May is a new cost-sharing formula that makes hiring an Indonesian costlier, but less risky.

But checks with 15 agencies found that some continue to bring in maids under the old cost structure.

Others, however, make elaborate arrangements to show they are doing everything by the book on paper, but in practice they are bending the rules.

It all boils down to the payment of placement fees.

With the new rules, employers no longer need to make a hefty upfront payment of these fees to the agents, a sum they typically recover by deducting it gradually from a maid's monthly salary in the first year of her contract.

Often, the maid would receive as little as $10 to $20 a month while clearing the debt.

With the new arrangement, the placement fee is financed through bank loans.

The maid is lent more than $2,200, which she will clear in eight months by paying the bank about $280 out of her monthly pay of $450.

But The Straits Times found that maids are not doing so.

Instead, many agents collect the $2,200 from the employers, claiming the money is to pay off their maids' loans.

But the cash is actually given as "deposit money" to Indonesian recruiters to entice them to continue supplying maids.

Meanwhile, the employer will deduct the $2,200 from the maid's pay as per the old practice.

This lying and bending of the rules by maid agents is condemned by the president of the Association of Employment Agencies (Singapore), Ms K. Jayaprema, who pointed out that the new rules had resulted in employers paying a whole lot more to hire a maid.

Besides the $2,200, employers also pay more in agency fees: between $1,200 and $1,600, compared with $400 and $600 before.

When contacted, Indonesian Embassy counsellor Sukmo Yuwono warned that his government will take Singapore agents and Indonesian suppliers who defy the bank scheme to court in Jakarta, and charge them with human trafficking.

He also urged employers to inform him "if they do not think their agents are following the new rules".

He added: "I will investigate each case."

Mr Sukmo also warned that Singapore agents caught using the old system to bring in maids will be barred from recruiting maids.

Those who get employers to pay their maid's bank loans will have a cap placed on the number of Indonesian suppliers they can work with.

He lamented that agents who flout the rules are preventing his government from solving the problems of the old system.

One major complaint against the old system was that employers who terminated the contract with their maid early often struggled to get a refund of the placement fee that they were made to pay upfront when hiring the maid.

But with agents defying the new rules, employers are not better off, because they still make upfront payments for their maid's loans.

But employers interviewed say they are caught between a rock and a hard place.

While they feel cheated for being made to pay their maid's bank loans, they fear any complaint will prompt the agents to delay, or even not get them a maid.

Said a manager of a medical clinic who is waiting for a replacement maid: "If I say 'no' to paying the maid's bank loan, I don't know how long I'd have to wait for another maid."

She asked not to be named, as she has yet to get a new maid although she has paid the agent about $2,000 for the bank loan.

There are about 206,000 maids in Singapore, and about half of them are from Indonesia.